Contractor Tip of the Month - March 2012
Words: Damian Lang Contractor Tip of the Month
By Damian Lang
A top manager of a big local company came to me recently with a terrible employee morale problem that he wasn’t sure how to fix. Like a doctor would do, the first thing we did was start checking symptoms before we could come up with a cure. If you are having the same issue, you can do the same. After asking several questions, the problem revealed itself.
We started with office personnel. Knowing he was running a second-generation company, I suspected there were some sacred cows in his operation. So, I asked my friend to list everyone in his office, from top to bottom of importance. Next, put each person’s pay next to their names. Boy, did we uncover some issues! For instance, Bob (not using real names), the sales guy who had been with the company for 30 years, was making huge money, but selling only peanuts. All the while, the other salesman, who had the fire in his belly, was being held back in pay as he hadn’t been with the company long. So why was Bob at the top of the pay list and toward the bottom of the production list?
I told my friend he would have to do something to get Bob’s pay to match his performance. “That’s going to be tough to do, because Fred (one of the owners) grew up with Bob, and they are like best friends,” he said. “There’s no way anything is going to happen to Bob.”
Then, there was Bill, the operations manager who was hell bent on doing things the way they’d always been done. (You know the kind, we’ve all had them.) Bill has been with the company forever and remembers the good ole days, when you could make money without making any daily changes. Bill’s circumstance was similar to Bob’s situation. It’s a common issue we have to face.
I also have seen situations in which new people get hired on and oversell their abilities, so you’ll give them bigger pay. Just apply the same test across the board, sacred cows and slick willies alike. Like it or not, I told my friend the obvious. Until the pay scale from top to bottom matched performance measures, morale issues would continue in his office. He agreed to go to work on it, but admitted it is going to be a hard pill for the owners to swallow.
Next, we listed what field crews produced compared to what they earn. It was easy to list them in order of pay as they all earned the same wage. I asked if they all produced the same amount.
“No, some of the guys are much better than others, but our contract says we must pay the same wages,” he replied. “I think they sometimes milk the job to get their hours.”
Feeling equality was the morale issue, I next asked if they got anything above their base pay.
“Yes, they get travel time, company vehicles to ride in, and some other perks,” he replied.
We laid out a plan to fix the morale of his field employees: Cut the travel time and the unnecessary vehicles, and give extra money to the top players, based on measurements of how the job is executed. In summary, change the field morale from the top, down, by rewarding good performance. I believe that once the attitude of the leader improves, the attitudes of the others will follow. In a couple of years, I hope to give you an update on his progress, but for now, at least he is attempting to align pay more toward what is being accomplished daily.
If you want to improve morale, make your own list from, top to bottom, of value your employees add to the company, and assure their pay mirrors this list. If you are not willing to slaughter the sacred cows or muddy the slick willies, you will always have morale problems. But, as long as you are honest, morale should align itself.
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